Archive for June, 2011

Press Release

It is no secret that for many years global banks have used artificial intelligence to make better trades. Now that technology might be coming to your local independent investment advisory service.

Caapi Technologies just announced that it signed a deal to use artificial intelligence technology to build custom trading systems for small to mid-size investment firms. Caapi will build applications with software development kits (SDKs) from ai-one that enable computers to understand human language to find undervalued stocks, bonds and derivatives.

The partnership makes Caapi one of the first consulting firms to use ai-one’s machine learning technology to build trading algorithms and platforms for traders, banks and hedge funds.

Building custom trading algorithms is a huge industry propelled by the success of high-frequency trading across global markets. Originally, these algorithms were designed to find and exploit pricing differences between stocks, commodities and derivatives. Now trading algorithms are so widespread and so sophisticated that they have completely reshaped markets to the point where pricing is often driven more by speculation than it is by the underlying value of the asset class.

The challenge now is to find underpriced opportunities that generate returns based on actual performance rather than market volatility. This requires that investors sort through vast amounts of unstructured data to find undervalued assets before they are identified by the rest of the market. Often this means reading text that can’t be processed by search engines like Google. Traditional algorithmic approaches, such as Google’s, fail as they only know what they are programmed to know or programmed to find. They miss finding unexpected results that don’t fit into an equation.

ai-one’s technology is described as “biologically inspired intelligence.” It is modeled after the human brain and does not depend on algorithms. Rather, it automatically sees the inherent patterns within data and forms associations between each data element. This enables machines to learn without any human intervention. More importantly, it enables people to ask the questions they wouldn’t normally know to ask.

The CEO of Caapi, Mr. Moris Oz, sees machine learning as the key to discovering hidden investment opportunities. “a-one’s technology enables us to build semantic associative search engines for our clients that understand how the price of any given investment is related to the unstructured data found on the internet.”

Caapi’s approach is to combine proven techniques using sophisticated algorithms with machine learning that understands words. “Language is not math,” adds Olin Hyde, VP of Business Development at ai-one. “Algorithms are fantastic at processing structured data. But human behaviors and communications are inherently unstructured and complex. We learn through words not equations. So why not enable computers to do the same?”

According to Moris Oz, CEO of Caapi, “ai-one’s SDK for machine learning could be the answer for understanding and correlating soft data driving price moves in the markets. I’m looking forward to applying this to new applications.” The market will soon tell if it works or not.

Do you know the magical number seven? Actually it is seven, plus or minus two (7±2), that is the limit on our capacity for processing information. Now, the number has shrunk to four, a new study finds. The researchers investigated the neural basis of this capacity limitation in monkeys performing the same test used to explore working memory in humans. They found that that the monkeys (and by extension humans) do not have a capacity of four objects, but of two in each hemisphere. Figuring out how the brain handles objects is important because working memory ability reflects the cognitive power that is measured by IQ scores, or the ability to learn a second language (via discovermagazine.com).

A dolphin researcher and a AI expert have developed an iPhone size device, that decodes dolphin language in real time. The device has already drawn interest from the SETI Institute. According to the Independent article though, no photos have been released yet.

Remember the Jetsons? They had a really useful robot, Rosie, to help them do the household chores. Rosie is one step closer, as researcher have improved the ability of robots to plan and to perform complex actions. The researchers tackled the problem with a hierarchical, progressive algorithm that can reduce the computational cost associated with performing complex actions. Key is to reduce the complexity of the larger goal of task and motion planning into smaller steps, then make a detailed plan for the first few, leaving the exact mechanisms of subsequent steps for later. This just sounds like us humans, planning only the first and second step of a complex activity and figuring out the rest along the way (mit.edu).

New tool allows programmers to build artificial intelligence into almost any software application.

SDK for Machine Learning

A new technology enables almost any application to learn like a human. The Topic-Mapper software development kit (SDK) by ai-one inc. reads and understands unstructured data without any human intervention. It allows developers to build artificial intelligence into almost any software program. This is a major step towards what Ray Kurzweil calls the technological singularity – where superhuman intelligence will transform history.

Unlike other machine learning approaches, ai-one’s technology extracts the inherent meaning of data without the need for any external references. A team of researchers spent more than eight years and $6.5 million building what they call “biologically inspired intelligence“ that works like a brain. It learns patterns by reading data at the bit-level. “It has no preconceived notions about anything,” explains founder Walt Diggelmann, “so it works in any language and with any data set. It simply learns what you feed it. The more it reads, the more it learns, the better it gets at recognizing patterns and answering questions.”

Technical Advances

Lightweight Ontologies (LWO)

The technology incorporates two major technical advances: First, it automatically creates what ai-one describes as a “lightweight ontology” (LWO), The system determines the relationships between data elements as they are fed into the system. The primary benefit of LWO is that it is completely objective — it makes associations without editorial (human) bias. LWOs are also very adaptive, automatically recalculating when ingesting new data. Unlike traditional ontologies, LWOs require no maintenance.

Dynamic Topologies

Second, ai-one’s technology generates “dynamic topologies” that transforms the data structure to find the best answer to any question. The benefits of dynamic topologies include incremental learning – the system gets smarter as it is exposed to more questions. Moreover, it is able to deal with ambiguity and unknown situations. The result is that the system can answer the questions that a person wouldn’t normally know to ask.

The SDK opens the door for many new, disruptive software applications. For example, it can replace search algorithms with more accurate “answer engines” that deliver the most precise answer to any question.

“We offer a core programming technology,” says Tom Marsh, President and COO of ai-one. “The possibilities are almost endless. Our business model is to license the SDK to software developers to build end-user applications. Our goal is to get Topic-Mapper to as many well-qualified programmers as possible and let the creativity of the market take over.”

Adoption has been quick.

The first version of the SDK was released in February 2011. In less than three months, more than 20 consulting partners signed up to use the technology to build commercial applications – mostly in Europe. Swissport matches passenger manifests against the US Department of Homeland Security’s No-Fly List. The core technology is used by Swiss law enforcement CSI labs to match shoeprints and other evidence from multiple crime scenes. Most recently, ai-ibiomics announced it will use ai-one’s SDK to read genome sequences to provide personalized medical services in Germany.

A logical next step is for the technology is to enable eCommerce, social media and other online applications to provide end-users with the most relevant, most accurate information for any given situation.

Bacteria in the gut can influence brain chemistry, and behavior and drugs such as antibiotics can influence bowel functioning according to a new study in mice. The researchers showed that disrupting the normal gut flora of the mice leads to changes in the animals’ behavior, making them less timid and more adventurous, as well as leading to changes in their brain chemistry.

Another recent study shows the link between gut bacteria and stress response. The researchers have found that stress can alter the balance of bacteria that live in the intestine, leading to immune system problems.